Investor, Keith Johnson, has sued billionaire, Elon Musk, including his carmaker, Tesla, and space firm, SpaceX, for $258 billion due to their role in the promotion of Dogecoin, which he described as a pyramid scheme.
The world’s richest man had been a promoter of the cryptocurrency, Dogecoin, for about a year after backing out of his constant publicity for bitcoin, the most popular and capitalised digital currency in the world.
During this period, there were persons who reportedly purchased Dogecoin due to Musk’s backing, but Dogecoin has since dropped in value, crashing to six cents as at Thursday, significantly below it’s high of 74 cents in May 2021 – a dip of -91.8%
Many investors have lost their investment in Dogecoin as a result of the dip, especially for Johnson, who began investing in 2019, and this prompted him to file charges against Musk, Tesla and SpaceX, on behalf of himself and other investors, demanding damages of $86 billion and another $172 billion for losses he incurred on his investment.
Johnson described Dogecoin as a pyramid scheme that shouldn’t be classified as an investment security cause it is not backed by gold or any other tangible driving force, neither does it have a unique utility compared to other cryptocurrencies.
He demanded the court bar Musk and his companies from promoting Dogecoin, and label the cryptocurrency as a gamble under the United States law, as well as that of New York.
According to court documents, Johnson said, “Dogecoin is not a currency, stock, or security. It’s not backed by gold, other precious metal, or anything at all. You can’t eat it, grow it, or wear it,” the lawsuit states.
“It doesn’t pay interest or dividend. It has no unique utility compared to other cryptocurrencies…It’s not secured by a government or private entity.” Adding that, “It’s simply a fraud whereby ‘greater fools’ are deceived into buying the coin at a higher price.
“Since defendant Musk and his corporations Spacex and Tesla Inc. began purchasing, developing, promoting, supporting, and operating dogecoin in 2019, [the] plaintiff and the class have lost approximately $86 billion in this crypto pyramid scheme.”